Gold and silver bounced today off their most recent lows with both scores moving from -100 to -90. Yesterday I said; “Mining stocks look like a double bottom and it wouldn’t surprise me to see a bounce coming” and today we saw GDX move up 1.62% and JNUG up 7.67%. I again only view these types of trades as short term scalps and not a buy and hold opportunity at this point in time. As I said, bounces come and they can be taken advantage of with the right instruments, but typically the triple leveraged investments are to be traded by experienced traders. At one point today JNUG was up 12%. Why would anyone not take a 10% gain in one day and not look back? These set ups come and go and a little patience can get you some nice short term profits. But again, I would only use small shares and keep tight stops.
Thoughts from the trading desk;
While gold has had a gradual slide, silver has had a dramatic move south of over 6%. Silver briefly consolidated around the previous 2014 low of $18.60. Once this had clearly given way though, follow through selling and stops being triggered caused silver on Friday to collapse below $18.20. Not only was $18.20 the low of 2013, it was also a five year low. Silver is now trading in territory that it hasn’t seen since 2010.
While the overall sentiment in metals has been bearish of late, all four are in positive territory today. A NY Fed official said that any increase in interest rates should be done cautiously, better than expected economic figures came out of China last night, and US air strikes in Syria prompted a flight to safe haven assets today.
I have added the 50, 100 and 200 day moving averages for gold and silver so you can get an idea of where we presently are price wise.
Doug Eberhardt is a 28 year financial services veteran and precious metals broker selling gold and silver at 1% over wholesale cost. Doug has written a book to help investors understand how gold and silver fit into a diversified portfolio, how to buy gold and silver, and what metals to buy. The book; “Buy Gold and Silver Safely” is available by clicking here Contact phone number for Buy Gold and Silver Safely is 888-604-6534
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